If you have not yet dived into the world of YouTube ads, it’s time to start.YouTube is one of the most powerful search engines in the world. Period. Once you think about it, it’s easy to understand why. Google owns YouTube, and Google just happens to run the most powerful search engine in the world.

This post won’t tackle starting your own YouTube channel. That’s an entirely different beast. In this post, we’ll look at what you need to know before you start advertising on YouTube so you can find the best option to benefit your business.


Does YouTube Advertising Work?

According to a report by StrikeSocial, YouTube advertising is extremely cost-effective. The report found that the average cost per view (CPV) was approximately $0.026, while the average view rate was 31.9%.

Meanwhile, the average view click-through rate (CTR) was 0.514%.

In other words, you can run an effective YouTube advertising campaign on a small marketing budget.


Are YouTube Ads Targeted?

One of the reasons this works is that YouTube uses targeted ads.

Remember, Google runs YouTube and uses its marketing know-how to target its ads to the extreme. According to the Google support page, the ads on YouTube are “tailored to your interests.”

If a user is logged on to YouTube via their Google account, YouTube uses a variety of information to determine which ads a user sees.

It looks at:

  •       Previous videos viewed;
  •       Apps on the device the user is using to view those videos;
  •       Websites the user has visited;
  •       “Anonymous identifiers” in the user’s mobile device;
  •       A user’s previous interactions with Google’s ads or advertising;
  •       Geographic location;
  •       Age range;
  •       Gender;
  •       And interaction with other YouTube videos.

As a YouTube user, this may seem highly invasive, but as an advertiser, this is an ideal way to reach your potential clients.


Types of YouTube Advertising

There are six key types of advertising that YouTube offers, but odds are, small business owners will not use them all.


Skippable In-Stream Ads

One of the most popular forms of YouTube advertising is skippable in-stream ads. These videos play before, during or after videos chosen by the user. After five seconds, the user can choose to skip the ad.

These ads are charged in two different ways by YouTube. There’s cost-per-view bidding, which you pay if the viewer watches the entirety of your video.

There’s also cost-per-impression, where you’re charged based on the impression no matter how long the viewer watches.


Non-Skippable In-Stream Ads

Non-skippable in-stream ads are 15 seconds or less and play before, during or after videos chosen by the user. As their name suggests, you cannot skip these ads.

These ads are charged by what Google calls “Target CPM bid,” which means you’re bidding for how much you’re willing to pay for each impression with the highest bidder winning.


In-Feed Video Ads

In-feed video ads are advertisements that occur to the side of the video that’s currently playing. These ads appear in “places of discovery,” such as search results, suggested next videos, or related videos.

For in-feed videos, you’re only charged if someone clicks on your ad and views your video.


Bumper Ads

Bumper ads are short ads that run before, during, or after a YouTube video. These are six seconds or less in length and are not skippable, meaning viewers have to watch them if they want to watch their selected YouTube video.

YouTube suggests you use this format when you’re trying to create brand awareness and reach.

Payment for bumper ads is similar to non-skippable in-stream ads, meaning “Target CPM bid.”


Other Advertising

Other advertising options include masthead ads and outstream ads.

Masthead ads run on the homepage of YouTube so that every user can see them. Be prepared to pay a lot of money for masthead ads. They’re charged on a cost-per-thousand impressions basis.

Outstream ads are mobile-only and do not run on YouTube. They’re ads that run on Google’s video partners and are charged based on how many people view your video for two seconds or more.


Tips for Advertising on YouTube

When it comes to choosing which advertising method is best for you and your business, remember that intention is important.

A bumper ad may not be the best selection if you’re trying to make a sale. Similarly, you may not want to pay more for a non-skippable in-stream ad when a bumper ad serves the same purpose.

Think about the intent of your advertising and your goals before you choose your advertising format.

The other issue many small business owners take into account is cost. While it’s difficult to lower your CPM, targeting is possible to ensure you’re getting the correct eyes on your ads.

By targeting specific geographic locations, age groups, or people with particular interests, you can ensure that you’re reaching warmer audiences for your advertising.

You can also increase your return on investment (ROI) through “remarketing” or “retargeting.” That’s when you specifically target users that have already visited your website or social media channels.

For details on how retargeting works, check out this previous post.


Influencer Marketing on YouTube

There is another form of YouTube marketing that you can consider outside of what YouTube offers. That’s influencer marketing.

Influencer marketing is run differently than the formal YouTube marketing in that it is direct contact with the influencer rather than YouTube.

Through influencer marketing, you will work directly with the influencer to market your business. This is an agreement that you set up with the influencer.

There are things that you need to take into account before you determine which influencer you want to work with, including the influencer’s audience, the types of videos the influencer makes, and your goal of the marketing campaign.

For more details on influencer marketing, check out this previous post.



YouTube advertising’s biggest draw is that it’s scalable. Whether you have a small marketing budget with just a few hundred dollars available per month or a large marketing budget measuring thousands of dollars, YouTube advertising can work for you.

You just have to give it a shot.


Written by Erika Towne